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Trends Shaping the Offshoring Industry Today

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Wednesday, July 07, 2010 |

Offshore Outsourcing Trends 2010

A continuously maturing global sourcing arena has caused the creation of a dynamic marketplace with changes in buyers’ needs and demands. These changes can have a severe impact on the need for next generation characteristics in today’s global service delivery models. These are furthermore marked by globalized approaches, industrialized delivery, and a growing global talent pool, reported Everest Group, a major global outsourcing and offshoring research firm.

Companies that have invested in offshoring have, over the years, realized that actual savings were not as high as initially projected. Costs can come great from cultural gaps and communication issues that directly impact the turnaround time as well as the quality of the end products. Furthermore, the synergy between the offshore team and the company can be lost due to management deficiencies.

Following the evolution of the offshoring industry into a more complex and sophisticated space, its service providers are required to look for a means of servicing the progressively higher professional needs of buyers that have gone far beyond mere labor arbitrage. Emerging as key factors on offshoring delivery redesigns worldwide are things such as operating model, talent management, and a good location portfolio.

These are the topics of a new global outsourcing and offshoring study conducted by research giant Everest, entitled Global Sourcing 2.0 - Evolving Global Delivery Imperatives for Outsourcing Service Providers.

The research group’s report on global sourcing gathers analyses on global delivery trends of all leading global service providers involved in offshoring. This is further supplemented with discussions with India’s buyers, services providers, and the group’s experience in serving the global sourcing industry.

“The evolution of the supplier delivery models is evident; more so with the industry dynamics to remain high on growth requirements, even when faced with an extreme competitive environment. As the buyers’ sourcing strategies and engagements mature, service providers are re-thinking their global delivery models to meet evolving buyer requirements related to location risk diversification, location-agnostic & consistent delivery experience, faster and lower cost transitions and deep domain expertise,” commented Everest Group Vice President of Research Amneet Signh.

Meanwhile, Guarav Gupta, Principal & Country Head of Everst Group, believes that understanding such trends “holds importance for service providers and buyers alike”.

“While it is critical for service providers to be aware of these imperatives and prepare to compete with the changing market paradigm, buyers need to incorporate and leverage these next-generation global delivery characteristics in their decision making to drive improved value from their sourcing programs”, said Gupta.